You’ve likely heard of Financial Independence. Many of the posts on this blog talk about my journey towards Financial Independence (FI). What is the reason you would want to become financially independent? There are many reasons to seeking financial independence. As you’ll see retirement is not the primary reason.
In this post I will list the top motives people seek to become Financially Independent. Of of course, the reasons might differ for everyone, and certain are more appealing to you than others. This is perfectly fine. There are many different motives to achieve FI. Not everyone wants to get to FI!
There are many reasons to achieve financial independence that I didn’t even think about! Let me know via the comment section if this is the situation! I’d like to know the reason you would like to become Financially Independent.
1. Security
When you attain financial independence, you’re protected from a variety of circumstances that could result in an income loss of significant proportions.
If, for instance, you are fired, or if your company is bankrupt or you’re unable to work , you should not face any issues maintaining your life. These events aren’t an issue for your financial situation once you have reached financial independence. These events could be significant for you, but they are not a big deal. If you’re financially secure, you’re prepared to deal with these without issue.
It also provides a sense of security of retirement. In the present, in Switzerland retirement isn’t very bad. However, who knows what the situation will be in the next 30 years. There might not be a retirement pension or assistance for those who are retired. If you’re already financially secure, you don’t have to be concerned about it!
I’m trying to prepare for these events, and I’m getting prepared now. If you’re in the process of achieving Financial Independence, these events can still be a problem. However, you’ll be able to handle them more effectively than the majority of people. This is another great thing about FI as it can enhance your financial situation while you work toward financial independence.
In fact, those on the road towards FI have more money than the typical. They spend less, and usually make more. Better finances can help to achieve their goals quicker and will also make it easier to weather financial challenges more easily.
To me, this is the most important reason to strive towards Financial Independence.
Fire The Boss is a great Financial Freedom Blog.
2. Family
Time spent with family is vital. However, often we are too busy working or doing other activities other than taking care of our family and our friends.
Financial independence allows us to have the freedom to be present with our loved ones and build more enduring bonds.
I would like to have more time in the future to spend time with my kids and build stronger bonds with my spouse, children and family members as well as friends.
Of course, I’m not putting off this! It is crucial not to make use of FI as a reason for delay in spending time with your loved ones. However, being financially independent can help in being able to spend more time doing more important things.
3. Freedom of choice
The majority of people who wish to achieve FI are looking to retire early.
I am also thinking of wanting to retire earlier. But, having the option to retire earlier is more important than the actual retirement itself. The option to retire early is crucial.
At the moment, I am still enjoying my job. If I wasn’t developing software for my business I’d be creating software to have enjoyment. Who knows whether that will be the situation in 10 and 20 years? Nobody!
Your company’s structure is likely to change. The people you work with can change. Your boss could change as well. You might like your boss and colleagues. What happens if they’re replaced by someone who you don’t like? Changes in your job could make an enormous difference to your work. After a few changes you might not enjoy your job in the same way you are now.
You too could change! A lot of people think they’ll enjoy the same things in the near future. However, this is not always the situation. People change a lot.
So, the option to retire or pursue something else is important for me. When I reach FI I can choose to decide to retire, or even start an enterprise or something else. A lot of people reach FI but do not decide to quit their jobs. Many people are still working on side business ventures. Some are even doing charitable work at very low pay. It is possible to explore FI even if you don’t plan to retire.
4. The time is short
Time is also an essential fact. It is extremely limited.
Let’s say that you have an average of 80 years in all. You don’t want to work for 65 years and want to be unemployed for the majority of the years. It is possible that you will continue working until the end of your days however, you could decide to retire or alter your lifestyle. You could also reduce the amount of time you work. These are all possible in the event that you’re financially independent.
I am happy with my job. However, there are other things that I like about my life and would prefer to spend more time doing more than just working five days per week up to the age of 65. In the event that I was Financially Independent, I’d also think about working part-time as an alternative.
5. A challenge
One of the things I love about working towards Financial Independence is that reaching FI is a challenge. In fact, it’s not easy for the majority of people to achieve FI prior to retirement.
The early retirement is also an issue. Although the concepts are simple, the implementation of these concepts isn’t easy. When I first learned about the concept of financial freedom, I didn’t believe it was feasible to attain that level of independence.
It’s good to face certain challenges in your life. They can teach you many things. It is important to master new concepts like investing. I’ve read a lot of books on personal finance and investing. I’ve learned a lot in less than a year of achieving financial freedom. This is a wealth of knowledge!
6. A fantastic adventure
The path to FI difficult, but it’s also extremely interesting.
I’d even say that it is an enjoyable journey. The path to FI is comprised up of lots of numbers crunching. It is essential to determine the value of your assets. You can also determine your FI Ratio and determine how far off the path you’re on. This is for me, extremely enjoyable and fascinating. I like numbers a lot.
I am also happy that I was able to cut down the amount we spent in the course of time! Prior to that, I was spending much more simply because I didn’t think about spending with the same perspective. Now that I am conscious of my spending habits it’s fun to reduce our spending!
It is also a fascinating field to invest in. It requires a lot of study to determine what you should invest in. Particularly, you have to know why you’re investing in your investments. There is no reason to making a decision to invest in something when you don’t understand the reason behind it!
My journey to FI has also inspired me to create this blog. The blog has also been an amazing trip. Although this isn’t the first time I’ve blogged, I’ve gained a lot of knowledge! I also enjoy writing on this blog quite a bit.
7. A different path
The idea of being financially secure and possibly retiring earlier (or at the very least, being capable of) is not a path that many people choose to take.
To me, it’s excellent. If everyone was taking the same route it would not be as attractive. A lot of paths don’t include FI which is equally good. If you’d rather become an entrepreneur and eventually get wealthy, there’s no problem with doing that.
The majority of my routes have been classic ones. I’ve attended an ordinary school. I’ve gone all up to the level of a Ph.D. Then, I joined an established company as a software developer. I am happy to take a different path by trying to get to FI. We’ll see how I can achieve it!
8. FI is a good model for teaching values
The path towards Financial Freedom will teach you the fundamentals and values that are important to you.
The most important aspect for FI is the value of Frugality. It’s difficult to achieve FI without being thrifty, at least in some way. Certain people are extremely cheap, while other individuals are comparatively frugal just.
Because you’ll be investing your way towards FI You will probably gain some wisdom from it. It is important to be doing with lots of thought before making any drastic choices. Your emotions are the biggest enemy when investing. You should be able to learn by observing your own mistakes. For example I made lots of investment mistakes when I first started. I’m now more experienced because I have learned from my mistakes.
Another thing you’ll discover is that health is vital. If you wish to be able to last a long time and live a long, healthy life it is essential to take good care for your health. Eat a balanced diet and avoid pushing the body (and your mind) beyond their limits.
For the moment, we haven’t alter our lifestyle however, through our vegetable gardens, we are eating healthier than we were before. By cooking our meals by ourselves the majority often and cooking at home, we are able to have a healthier food plan than fast food restaurants. In 2019, we created a tiny Health Plan to keep healthy for longer.
9. Create wealth generationally
If you follow an effective withdrawal rate strategy it is likely that you will have more money than you will need at the close. The money can then pass to the next generation members of the family.
Many people are drawn to the idea of accumulating wealth over generations. To me, it’s not the primary motive to strive to achieve financial independence, but it’s an added benefit. I’d be happy to pass my wealth on to the next generation.
However, this shouldn’t be a reason for the next generation to not to be able to earn a living and depend completely on the wealth. However, this may help them achieve financial independence when they reach it.
In the ideal scenario, you would like the next generation to keep passing down this wealth and not just spend it. So, a crucial part of this is giving the financial knowledge to the next generation. Hopefully, they will carry on this pattern.
Conclusion
As you can see, there are a myriad of reasons to strive for financial freedom.
You’ll have more freedom when you’re financially secure. Your life as well as the lives of your family will be much more comfortable. Additionally, it will help you learn a lot of things and can be an exciting adventure. My life has improved significantly when I began to achieve FI.
Perhaps some of these arguments might appeal to you. However, they might not. There are many different motives to pursue financial independence. Some people might not be interested in reaching FI in the first place. There’s no reason why everyone should be a part of the FIRE concept. There are other paths. It’s up to you to decide which one best suits your needs.
Don’t make the mistake of setting your sights on FI simply because others are doing it. If FIRE doesn’t appeal to you, then try to achieve the goals you desire and not those of others!